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Full-Text Articles in Law
The Anticompetitive Effect Of Passive Investment, David Gilo
The Anticompetitive Effect Of Passive Investment, David Gilo
Michigan Law Review
There are many cases in which a firm passively invests in its competitor. For example, Microsoft passively invested in $150 million worth of the nonvoting stock of Apple, its historic rival in the operating systems market. Also, in November 1998, Northwest Airlines, the nation's fourth-largest airline, purchased 14% of the common stock of Continental Airlines Inc., the nation's fifth-largest (and fastest growing) airline. Northwest competes with Continental on seven routes, serving 3.6 million passengers per year. In another example, TCI, the nation's largest cable operator, became a passive investor with a 9% stake (which can be increased, under the terms …
The Efficient Norm For Corporate Law: A Neotraditional Interpretation Of Fiduciary Duty, Thomas A. Smith
The Efficient Norm For Corporate Law: A Neotraditional Interpretation Of Fiduciary Duty, Thomas A. Smith
Michigan Law Review
To economically oriented corporate law professors, distinguishing between directors' fiduciary duty to shareholders and a duty to the corporation1 itself smacks of reification - treating the fictional corporate entity as if it were a real thing. Now the orthodox view among corporate law scholars is that the corporate fiduciary duty is a norm that requires firm managers to "maximize shareholder value." Giving the corporation itself any serious role in the analysis of fiduciary duty, the thinking goes, obscures scientific insight with bad legal metaphysics. Some recent scholarship and legislation, such as constituency statutes, have challenged this "shareholder primacy" view. Contestants …
Investment Advice And The Fraud Rules, Robert N. Leavell
Investment Advice And The Fraud Rules, Robert N. Leavell
Michigan Law Review
Every day thousands of Americans are assaulted by mail, telephone, and personal contact with advice on how to invest their money for capital gains, often with dazzling reminders of the opportunity for great profits. If the advice is good, they may indeed one day have their treasure ship which will send their children to college or provide a round-the-world trip after retirement. If the advice is bad, they will of course learn by experience. But many of them will have to apply their lesson to a second inheritance or twenty years' savings. The quality of investment advice is therefore a …
The Solely-For-Voting-Stock Requirement In "B" Reorganizations Satisfied By Cash Payments For Fractional Shares-Mills V. Commissioner, Michigan Law Review
The Solely-For-Voting-Stock Requirement In "B" Reorganizations Satisfied By Cash Payments For Fractional Shares-Mills V. Commissioner, Michigan Law Review
Michigan Law Review
The Internal Revenue Code requires recognition of gains or losses realized upon a sale or exchange of property. An exception to this general rule is found in section 354(a)(1), the basic nonrecognition provision for stock-for-stock reorganizations. This section provides that a stockholder need not recognize gains or losses "if stock or securities in a corporation a party to a reorganization are, in pursuance of the plan of reorganization, exchanged solely for stock or securities in such corporation or in another corporation a party to the reorganization." However, before section 354 can be reached, the exchange must satisfy one of the …
Antitrust Laws- Judicial Relief For Violations Of Section Seven Of The Clayton Act - Disenfranchisement In United States V. E. I. Du Pont De Nemours & Co., Barbara B. Burt S. Ed.
Antitrust Laws- Judicial Relief For Violations Of Section Seven Of The Clayton Act - Disenfranchisement In United States V. E. I. Du Pont De Nemours & Co., Barbara B. Burt S. Ed.
Michigan Law Review
This comment will approach section 7 relief questions and solutions primarily in the light of du Pont's unique facts, which included a vertical stock acquisition made thirty years before the judicial proceeding plus the complicating factors of vast financial interests, numerous innocent investors and several corporate interrelationships. Thereby were posed complex problems regarding (1) parties to the relief determination, (2) interests to be affected by the decree and (3) the manner of affecting those interests.
Corporations - Dividends - Date From Which Cumulative Dividends Accrue, Dudley Chapman
Corporations - Dividends - Date From Which Cumulative Dividends Accrue, Dudley Chapman
Michigan Law Review
Defendant corporation issued preferred stock in 1937 under a charter amendment which provided that such stock should " ... pay dividends at the rate of six percent ... , but when not so earned and paid, the dividends so provided shall be cumulative. Said dividends shall be paid annually beginning the Fifteenth (15th) day of March, 1938... " The plaintiff held 100 shares of defendant's preferred stock issued in 1945, and the above provision appeared on his certificate. During dissolution of the defendant in 1955, the plaintiff claimed cumulative dividends from 1938 as an innocent purchaser for value, basing his …
Securities Legislation - Limitations Upon The Scope Of Rule X-10b-5, Cyril Moscow
Securities Legislation - Limitations Upon The Scope Of Rule X-10b-5, Cyril Moscow
Michigan Law Review
A syndicate attempted to acquire all of the outstanding stock in a bridge corporation pursuant to a plan to transfer the stock to a bridge commission and realize substantial returns. The price offered for the stock was well over the market price but the resale plan was not disclosed. After control of 80 percent of the stock was obtained, the syndicate's purchasing agents were installed as officers and directors. They continued to purchase the stock without revealing the plan and the anticipated profits. Upon the completion of the plan, former stockholders in the corporation brought a class action against the …
Joint Adventure - Fiduciary Relation Of Parties Thereto, E. George Rudolph
Joint Adventure - Fiduciary Relation Of Parties Thereto, E. George Rudolph
Michigan Law Review
Defendant corporation and one Goldberger, the testator of the plaintiff, entered an agreement to carry on a trading account in the stock of a certain brewery over a limited period of time. By the terms of the agreement both were to contribute 50,000 shares of the stock, which were to be held by the corporation, and all purchases and sales of the stock by the corporation were to be deemed made in behalf of the account. Defendant corporation was to receive twenty per cent of the net profits for its services and the rest was to be equally divided. During …
Taxation - Federal Income Tax - Evasion Through Use Of The Corporate Entity, G. Randall Price
Taxation - Federal Income Tax - Evasion Through Use Of The Corporate Entity, G. Randall Price
Michigan Law Review
The taxpayer purchased A Company stock from X for $100,000 and later sold it for $7,500, deducting the loss in his tax return for that year. Following the discovery of fraud on the part of X he reacquired the stock for $8,000 and then negotiated a settlement with X providing for a resale to X for $100,000. To avoid high taxes on the resulting profit, the taxpayer organized B corporation and purchased all its stock. He then sold to it the A Company stock and all his claims against X in return for its promise to pay back the $100,000 …